consecutive bank holidays next year

Posted on May 23, 2011 by Martin Malone

The Royal Wedding last month serves as a timely reminder of the fact that workers have no statutory entitlement to time off on bank or public holidays (yes, technically they are different).

The Daily Mail on 28 April ran an article under the bye-line “Bosses accused of using little-known rule to wriggle out of extra bank holiday payment”. So it seems a subtle distinction which is common knowledge to HR professionals and employment lawyers is perhaps not generally well understood: the basic position is that there is a statutory right to 28 days’ holiday per year but no statutory right to take any of that holiday (with or without pay) on bank or public holidays.

That being said many workers are entitled either to paid leave or to overtime rates of pay on bank and public holidays under the terms of their employment contracts. There may be express contract provisions or there may be implied terms such as customary arrangements which may amount to implied contractual terms.

The basic position, subject to any contractual difference, is that a full time worker is entitled to 28 days’ holiday per year and that any bank or public holidays on which they do not work are included in counting those 28 days. A pro rata calculation, which can be complicated, has to be made for part time workers. It is worth noting that a part time worker who never works on Mondays is not entitled to pro-rata time off (or pay in lieu) in respect of Bank Holidays which always fall on a Monday.

In England and Wales there are six regular bank holidays, New Year’s Day, Easter Monday; the first and last Mondays in May, the last Monday in August and Boxing Day. To these must be added two common law or public holidays, on Good Friday and Christmas Day (if Christmas Day or Boxing Day fall on a Saturday or Sunday the holiday is postponed until the Monday – and Tuesday if necessary).

In Scotland 2 January is an additional bank holiday (or 3 January if the 1st or 2nd is a Sunday) and the first rather the last Monday of August is a bank holiday.

Public holidays can be added by Royal Proclamation, as for the Royal Wedding last month and for the Queen’s Diamond Jubilee on Tuesday 5 June 2012. Although perhaps not yet widely known the Government announced in January 2011 that in 2012 the last Monday of May holiday will be put back a week to Monday 4 June. This will ensure that the Queen’s Jubilee will be an occasion really worth waiting for and a great warm up for the Olympic Games a couple of months later. Or, for others like me, an opportunity to make the most of additional entitlement by getting out of the country for a few days!

when does employment end?

Posted on May 23, 2011 by Martin Malone

It can be critically important in employment law to know when a person’s employment came to an end. This is mainly because there are strictly applied time limits for bringing certain claims in employment tribunals based on the date on which employment was terminated. For example, an unfair dismissal claim must normally be presented to an Employment Tribunal before the end of the period of three months beginning with the “effective date of termination”. The power of employment tribunals to extend the time limit is extremely limited, meaning that it can be very difficult to persuade them to do so.

For this reason, and for other reasons such as calculating the length of “continuous employment” required for accruing employment certain rights, it can be very important to be clear about how to ascertain the “effective date of termination”.

An EAT case in April 2011 has helped clarify this point. For many years it has been established law that where an employee is dismissed by word of mouth notice is deemed to start from the beginning of the day after it was given. This is because the law takes no account of fractions of a day so the day on which notice is given does not count. However, it has not been certain that the same rule applies where the dismissal notice was in writing, not least because written notices often specify the date on which the notice period starts and/or ends.

In the case in question, an employment tribunal had refused to hear an employee’s unfair dismissal claim because, according to the tribunal, the claim had been lodged one day out of time. The claim had been lodged on 2 May 2009. The employer pointed out that the emailed dismissal letter giving the employee three months’ notice of dismissal had been received by the employee on 3 November 2008. According to the employer this meant the effective date of termination was 2 February 2009 and the last day for filing an unfair dismissal complaint was therefore 1 May 2009. As the claim had been filed on 2 May it was out of time. The employment tribunal accepted this argument, refused to allow an extension of time and dismissed the claim.

The employee appealed to the EAT. He won.

In a fully reasoned decision the EAT made it clear that, unless there is some agreement or stipulation to the contrary, the same rule about when notice starts to run applies to written notices of dismissal as to verbal notices. So in both cases the default position is that notice starts to run at the beginning of the day after it is given. Therefore in this case the notice period ran from 4 November 2008, not 3 November, so the effective date of termination was 3 February 2009, not 2 February. The last day for filing an unfair dismissal claim was therefore 2 May 2009, meaning that the employee had filed his claim in time after all.

For practical purposes, a lesson to be learned from this case (Wang v University of Keele) is that it will generally be prudent for an employer to stipulate the intended date of termination in any dismissal letter. That will generally avoid any uncertainty. The other, more general lesson, for both employers and employees is to be fully aware of the great importance of the statutory time limits and the fact that they are generally very strictly applied by employment tribunals.

TUPE

Posted on May 23, 2011 by Martin Malone

A key element of the TUPE Regulations provides that, where either the new or previous owner of a business dismisses an employee for a reason connected with its sale or transfer, then that dismissal will be automatically unfair. The only way the employer can avoid that result is if he can show that the dismissal is for an “economic, technical or organisation reason involving changes in the workforce”.

So far, so good. However, the owner of a business is quite likely to “tidy it up” with a view to putting it up for sale, and this might include dismissing an employee some time before the business is actually transferred – perhaps, indeed, before a new owner has even been identified. In that situation, is the dismissal really for a reason connected with the transfer and is the employee still protected? It appears that the EAT’s definitive answer to that question is now “yes”.

Two different – and conflicting – lines of authority have previously existed. One required an actual transfer to be in existence (albeit not yet actually taken place) before TUPE’s protection could arise; the other considered that a prospective transferee need not even be in place yet. In Spaceright Europe Ltd v Baillavoine & Anor, (EAT 1 February 2011) the EAT has ruled that the second – more generous – line of authority is the one that should be followed.

A Mr Baillavoine was Chief Executive Officer of Ultralon Holdings Ltd (UHL). Various consultants were appointed over time and reviews of the companies’ viability carried out. In due course, on 23 May 2008, UHL and its subsidiary Ultralon Ltd (UL) went into administration: Mr Baillavoine was dismissed by the administrator. On 25 June 2008 the businesses of UHL & UL were sold to Spaceright – a TUPE transfer. Spaceright was run and owned by those same consultants.

Mr Baillavoine had lost his job, and shares he had in UHL were worthless. He was understandably suspicious, and claimed unfair dismissal. An employment tribunal ruled in favour of Mr Baillavoine. It concluded that he had been dismissed so as to enable a purchaser of the business to acquire the business and assets without his continued employment (his salary of £120,000 might also have presented a problem for a prospective purchaser of the business). His dismissal was therefore automatically unfair unless it could be shown to have been for an “economic, technical or organisation reason involving changes in the workforce” – which it couldn’t.

Spaceright appealed to the EAT but lost. Faced with the conflicting authorities mentioned above, the EAT clearly preferred the latter. It agreed with the original tribunal that TUPE applied even though at the time of Mr Baillavoine’s dismissal the sale of the business which eventually took place had not been agreed. As there was no “economic, technical or organisation reason involving changes in the workforce” for dismissing Mr Baillavoine it therefore followed that his dismissal was automatically unfair.

Agency Workers Regulations 2010 – official guidance

Posted on May 20, 2011 by Martin Malone

As is well known, with effect from 1 October 2011 new regulations come into force to prevent discrimination against agency supplied temporary workers. Under the Regulations agency workers will be entitled to the same basic treatment as directly employed workers once they have completed a qualifying period of 12 weeks in a particular job. This will apply in respect of basic employment and working conditions, notably pay and working time.

The UK regulations are required by EU rules (the 2008 EU Agency Workers Directive). The Coalition Government said in autumn 2010 that it would not “gold-plate” EU directives but also said it had no plans to make changes to the 2010 Agency Workers’ Regulations introduced by the previous Government. The regulations will thus go ahead to come into force as planned on 1 October 2011.

In early April 2011 the government published draft guidance to the regulations. A final version of the guidance is expected in early May.

The draft guidance says that an agency worker (often referred to as a ‘temp’) is someone who has a contract with an employment agency but works temporarily for and under the direction and supervision of a hirer. An important section of the draft guidance explains that certain categories of worker are likely to be outside the scope of the regulations (of course the courts and tribunals will have the final say on this) suggesting that the following will NOT be covered by the regulations:

individuals who find permanent employment with an employer through an “employment agency”;
individuals who find work through a temporary work agency but are in business on their own account;
individuals working on Managed Service Contracts where the worker does not work under the direction and supervision of the host organisation;
individuals working for in-house temporary staffing banks where a company employs its temporary workers directly (and they only work for that same business or service);
individuals who find direct employment with an employer through an “employment agency”; and
individuals on secondment or loan from one organisation to another

The draft guidance makes it quite clear that the regulations are NOT retrospective. The 12 weeks’ qualifying period cannot start before 1 October 2011.

There will be various “tricky areas” on which it would be prudent for employers to take expert legal advice. These include:

Bonuses. While basic pay is clearly covered by the regulations, the position is not so straightforward when it comes to entitlement to bonuses.
Absences. First, their effect on calculating the 12 week qualification period if they take place during that period and, second, their effect if they are related to maternity leave.
Working and employment conditions. While it is easy to say that these must be the same as they would be if the worker had been directly employed by the employer rather than supplied through an agency, it will be tricky to know exactly what is required if there is no directly comparable worker.

As noted above, the final version of the guidance is expected in the near future. Employers who are likely to be affected, as well as employment agencies, should take care to ensure that their practices are consistent with the requirement of the Regulations and guidance in good time for their coming into effect on 1 October. If this is relevant for your business (bear in mind that it applies to nearly all “temps”) then make sure that you contact us.

reporting of accidents etc. at work and elsewhere

Posted on May 20, 2011 by Martin Malone

In June 2010 the Prime Minister appointed Lord Young of Graffham to review health and safety laws and the growth of the compensation culture. Lord Young’s report “Common Sense Common Safety”, was published in October. One of the recommendations was that the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations should be amended to extend from three to seven days the period before an injury or accident at work must be reported.

The report was roundly criticised on the basis that it played to tabloid headlines rather than the real experiences of the vast majority of people involved in accidents, mainly road traffic accidents which, of course, are not predicted by anyone involved in them (other than a small minority who abuse the process).

In late January the Health and Safety Executive issued a formal consultation document which set out this recommendation as a formal proposal and invited comments by 29 April.

Lord Young has now also come in for criticism from those who are concerned with reporting accidents.

Towards the end of the consultation period an interesting response came from the Royal Society for the Prevention of Accidents. RoSPA suggests that the proposal would be counter-productive. RoSPA takes the view that the number of reportable incidents would reduce so dramatically that employers would forget how to do the reporting and probably even forget that they are under an obligation to do so.

RoSPA recommends instead that the best way of reducing the red tape burden on employers would be to restrict the duty to notify the HSE to cover only “fatal and major injuries, cases of work-related ill health on the ‘notifiable’ list and incidents on the list of ‘dangerous occurrences’”.

RoSPA suggests that rather than be under a duty to report to HSE less major incidents employers should be required to investigate and keep internal records of all injuries requiring A&E attendance or medical intervention, including injury from work-related road crashes. It says “Record-keeping would need to be proportionate and not unduly burdensome but records would need to be made available to enforcing authorities if required”

We will have to wait and see what the official response is going to be. However it seems pretty certain that in one way or another the RIDDOR regulations will be amended in the foreseeable future in a way which reduces employers’ reporting obligations.

sex discrimination – speculation can be taken into account

Posted on May 20, 2011 by Martin Malone

Even leading law firms can get it wrong. What do employers do if they have to make redundancies and one of the candidates has been absent on maternity leave? That gave rise to a dilemma for national solicitors’ firm Eversheds. They have lost a legal battle but it is possible that they will win the financial war as compensation awarded against them is to be reassessed.

Eversheds had to dismiss as redundant one of the two solicitors in a particular department. There was a potential sex discrimination problem because one was a woman and the other a man. The woman had recently been absent on maternity leave and one of the criteria used in the selection process concerned levels and timings of billing. That criterion would obviously weigh against her as she had been away. Not wanting to be accused of sex discrimination by the woman concerned, Eversheds decided that the most appropriate way to play fair was to deem that for redundancy selection purposes she had had a good billing performance record. They awarded her “points” on that basis.

In the event it was the male solicitor, who had been with Eversheds for 14 years, not the woman, who was selected for redundancy. Eversheds then faced a sex discrimination claim by him.

He had complained from the start that the “favouritism” shown to his female colleague amounted to sex discrimination against him. Eversheds had clearly been in a quandary but felt what they were doing was fair and that if he sued them they would be able to rely on an exception in the anti-sex discrimination statute to the effect that in considering whether a man has suffered unlawful sex discrimination “no account shall be taken of special treatment afforded to women in connection with pregnancy or childbirth”.

He did sue. And he won. Not only did he win, but the employment tribunal awarded him well over £100,000, mostly for loss of future earnings. The tribunal refused to take into account the possibility that he might have been dismissed anyway a few months later in a separate redundancy exercise on the basis that this was mere speculation. Eversheds, no doubt feeling badly treated, appealed to the Employment Appeal Tribunal, both against the decision that they had acted unlawfully and against the amount of compensation.

At the appeal they lost on the first of these points. The President of the EAT said that the exception noted above should be construed “in a manner which incorporates the principle of proportionality”. On the facts of this case Eversheds had gone beyond what was reasonably necessary – there were alternative ways of removing the maternity related disadvantage to the woman without unfairly disadvantaging the male claimant. Eversheds had gone over the top in the method they used to ensure that she would not be placed at a disadvantage in the redundancy selection process.

However Eversheds did win on the compensation point to the extent that the EAT sent that aspect back for reconsideration by a different employment tribunal. In doing so the Appeal Tribunal made the important point that the employment tribunal had a duty to take a view on whether the claimant in the case would have been dismissed anyway a few months later in a second redundancy exercise notwithstanding that this would involve a significant degree of speculation. Quoting from an earlier judgment, the President said that “The mere fact that an element of speculation is involved is not a reason for refusing to have regard to the evidence” and gave a strong steer to employment tribunals that when assessing compensation in a dismissal case they should not decline to undertake a “would he have been dismissed anyway?” exercise merely because it involves speculation.

For those who want to read the full story, the EAT judgment in Eversheds Legal Services Ltd v de Belin, is available on the internet.

interns or, as we call them outside London, people on work placements!

Posted on May 20, 2011 by Martin Malone

There has been much recent publicity about the position of interns. There are basically two issues, one legal and the other social. The legal point relates to the fact that interns are often (but not always) unpaid or low paid and so National Minimum Wage issues arise. The social point (not considered further here) has had particular significance recently following a Cabinet Office paper (Opening Doors, Breaking Barriers) launched by Nick Clegg on 5 April 2011 – the media were quick to charge the unfortunate Mr Clegg with hypocrisy as he claimed to be wanting to stop unpaid internships, which generally help children of the wealthy and well-connected to get a head start while he had himself worked as an intern in his early days in politics.

So what is an intern? There is no legal definition. Essentially an intern is just a person who works in a temporary position, with an emphasis on training rather than merely employment. In some ways, therefore, an intern is like an apprentice. Some interns are paid but often they are not – which is where the legal point comes in.

If an intern counts as a “worker” for the purposes of the minimum wage legislation then the law requires payment of the minimum wage unless a specific exemption applies. However, as many have discovered, the exemptions from the minimum wage are narrow (for example, there is no exemption for disabled people in supported work, which can lead to problems for charities helping such people as well as for the disabled people concerned).

There are specific exemptions for students doing a first degree (or a teacher training course) where the course involves working for not more than 12 months, for government accredited apprenticeships, for some volunteer work and for certain work-based training schemes. However, there is certainly no specific exemption for interns. Thus in November 2009 the Reading employment tribunal ruled that an intern paid on an expenses-only basis was a “worker” for purposes of the minimum wage legislation who was therefore entitled to pay at least in line with the national minimum wage, including holiday pay (Vetta v London Dreams Motions Pictures Ltd).

It is the precise definition of “worker” in the minimum wage legislation which is therefore most important. It includes any person who works under a contract of employment or under “any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual …” (National Minimum Wage Act 1998 s.54).

In an Institute for Public Policy Research paper published in July 2010, one of the co-authors pointed out that:

“There is a mistaken belief that employers can take on people on a voluntary basis if both sides agree – but that’s not what the law says. If an intern is doing work for a company, then they need to be paid- it’s as simple as that. In practice, this isn’t what happens because employers don’t understand the law and enforcement agencies are turning a blind eye. This is a real shame for all those hugely talented young people who can’t rely on their parents to fund an unpaid internship. We should be doing much better for these young people.”

In addition to the Cabinet Office and IPPR papers noted above, the Low Pay Commission’s recent (April 2011) report to the Government on the National Minimum Wage includes a recommendation that the Government take steps “to raise awareness of the rules applying to payment of the National Minimum Wage for those undertaking internships, all other forms of work experience, and volunteering opportunities. In addition, we recommend that these rules are effectively enforced by HMRC using its investigative powers”.

It seems unlikely that the subject will now go away. The BBC website (23rd April 2010) notes that Prime Minister David Cameron recently said he is “very relaxed” about giving work experience to personal acquaintances while in contrast Deputy PM Nick Clegg says he is “not relaxed about this at all”. Sound advice given the increased interest in this subject is that a prudent employer thinking of taking on an intern should carefully consider all relevant aspects, not least the legal aspects – and all the more so if they are or might be in the public eye.

expert witnesses

Posted on May 20, 2011 by Martin Malone

The Supreme Court ruled on 30 March 2011 that (save in respect of defamation) it is time to bring to an end the immunity from suit traditionally extended to expert witnesses. So from now on if an expert witness is negligent in giving evidence in a trial it will be open to a person who has suffered as a result to sue the expert witness.

Although the case did not concern an employment matter, the ruling is, of course, of general application to all areas of litigation, including employment law.

In the case, a Mr Wynne Jones had been involved in a car accident. A clinical psychologist, Ms Kaney, diagnosed PTSD (post traumatic stress disorder). Proceedings were issued, liability was agreed, and the only question remaining was the level of damages. A consultant psychiatrist then examined Mr Jones and concluded that he was exaggerating his symptoms. On the order of the Court, the two experts produced a joint report, in which Ms Kaney now indicated that Mr Jones had misled her, and that he did not in fact suffer PTSD.

This, of course, damaged Mr Jones’ claim and he had to settle for less than he had anticipated.

Mr Jones sued Ms Kaney for negligence. She sought a strike out which the High Court granted, holding that in accordance with established case law it was bound to rule that, as an expert witness, she had immunity from such a claim in connection with preparing a joint statement for trial purposes.

Mr Jones appealed directly to the Supreme Court. He won by a 5-2 majority.

The Supreme Court concluded that the original rationale behind the immunity – concern that, in breach of his duty to the court, an expert witness might be reluctant to give evidence contrary to his client’s interest through fear of being sued – no longer applied. There was no conflict between the duty that the expert had to provide services to his client with reasonable skill and care and the duty he owed to the court. The same immunity used to apply, for similar reasons, to advocates and its removal in 2001 had not diminished the readiness of advocates to perform their duty. No evidence suggested that the immunity was necessary to secure an “adequate supply of expert witnesses”. It was time to remove it.

Any readers of this note intending to use the services of expert witnesses in a court or tribunal should take note of this new ruling (the case is Jones v Kaney [2011] UKSC 13, Supreme Court on 30 March 2011).

National Minimum Wage increases for October 2011

Posted on May 20, 2011 by Martin Malone

The Government has announced that it is accepting the National Minimum Wage recommendations in the Low Pay Commission’s 2011 report.

Accordingly increases in the National Minimum Wage will come into effect on 1 October 2011 as follows:

The adult rate will increase by 15p to £6.08 an hour;
The rate for 18-20 year olds will increase by 6p to £4.98 an hour;
The rate for 16-17 year olds will increase by 4p to £3.68 an hour;
The rate for apprentices will increase by 10p to £2.60 an hour; and
The accommodation offset will increase from £4.61 to £4.73 per day.

You may also be interested to read the post on “interns” and the NMW in this month’s update.